Panama Private Interest Foundations

Panama Private Interest Foundations

Private Foundations Concept.

This distinguished legal entity, while similar to a trust, maintains its own legal status much like a corporation. The Private Interest Foundation is formed through the donation of assets belonging to a person or group for specific purposes, which are outlined in its foundation charter. Once a Panama foundation has been established it can be used to own property, open bank accounts, exercise a range of rights and answer to associated debts and obligations.

The main difference between a Private Interest Foundation and other types of foundations lies in its function. This type of foundation is not created for public benefit but for purposes associated with private interests, which is something that is only permitted in select countries.

Additionally, unlike a commercial company, a Private Interest Foundation has no shareholders or partners and cannot be used to engage directly in business or profit yielding activities with certain limited exceptions.

Practical uses of a Private Interest Foundation.

The possible uses of a private foundation are so broad that we can safely ascertain that basically all of the objectives which can be achieved by the widely used “trusts” can also be accomplished by properly structuring a Panama Private Interest Foundation.

Panama PIF’s are mostly utilized as the ultimate holder of a given patrimony administered by professionals for the benefit of the founder and/or other appointed beneficiaries, allowing the Founder, at the same time, to plan in advance (in the Regulations) for the transfer of the benefit or the orderly succession of such patrimony in case of his sudden demise.

To guarantee a family financial security.

The foundation can be used as a means to ensure annuities, pensions, for the support of minors, for the education of children, to serve as beneficiary, etc.

Alternative to a will.

A Private Interest Foundation offers a greater level of flexibility and can be employed to avoid circumstances of mandatory heirs who would otherwise receive a percentage of the inheritance.

Alternative to a holding company.

It is possible to own shares and bonds of other entities or corporations with a Private Interest Foundation. This involves a high degree of privacy and can also be used to protect and manage investments in stocks, mutual funds and real estate property.

Mata & Pitti is a law firm that was established in the Republic of Panama in 1984 with the goal of bringing the international community a full range of offshore legal services. Our experienced Panama lawyers can offer quality assistance for your business no matter where you are located.